I haven't used an iPod since I bought the car. 32 GB USB flash drive fits in the center console USB port without taking up the extra space an iPod or hard drive would. Plus the hard drive route is hit and miss. Some won't power up at all because of the limitations on how much power a USB port can supply. There is an extensive thread about hard drives on e90post. For everyone model out there, you'll have guys that say it works and other guys that say it doesn't. Looks like kmarei has one that works for him though.
09 E90 M3 - Interlagos Blue / Black Novillo / Sycamore Anthracite / Eibach / HRE